Cairn stock dips on Vedanta woes

Shares of Cairn India fell by over 4% in early trade before recovering partly to end the day 2.5% down at Bombay Stock Exchange on Monday, as jittery investors went for panic selling amid uncertainty over the royalty-sharing issue.

Shares of Cairn India fell by over 4% in early trade before recovering partly to end the day 2.5% down at Bombay Stock Exchange on Monday, as jittery investors went for panic selling amid uncertainty over the royalty-sharing issue.

The company's stock fell by 4.14% to touch an early low of R332.10 on BSE, before ending the day at R337.50 or 2.58% below Friday's closing price.

"The fall in the stock is because of concerns over royalty sharing. But for long-term investors the stock still is a 'buy' option," an expert said.

The final decision in the Cairn Energy-Vedanta Resources stake sale deal will be taken by the Cabinet Committee on Economic Affairs (CCEA).

A Group of Ministers has said the two firms must agree to treat royalty paid by state-owned ONGC on Cairn India's mainstay Rajasthan block as cost recoverable, and pay cess.

"There's a lot of uncertainty and market does not like lingering issues towards any stock," Unicon Financial Solutions CEO Gajendra Nagpal said. Meanwhile, shares of ONGC also fell by 1.59% to touch a touch a low of Rs 278.50 on BSE.